As the government and the mayor of London, Boris Johnson, formally approved the Olympic Park Legacy Company's decision to award the stadium to West Ham's joint bid with Newham council, the Premier League sparked a new battle with Hearn, who claims the move could put his club out of business and is threatening legal action.

Hearn accused the Premier League of ignoring its own rules and said the parliamentary approval was "savage news". The Premier League said it had communications with Hearn about the issue before it decided it could not intervene and that he had said he had favoured a rival bid for the stadium by Tottenham Hotspur.

The statement said: "The board came to the decision that on balance it would be unreasonable to prevent either Tottenham Hotspur or West Ham United from moving to the Olympic site as long as they satisfied all of the relevant criteria stipulated by appropriate Olympic and statutory authorities. With particular reference to Leyton Orient, full consideration was given to a letter written by its chairman, Barry Hearn, to the Premier League prior to the board meeting at which the decision was taken."

But Orient responded: "It is clear from the Premier League's statement that they do not understand, or have not read, their own rules ... That Mr Hearn believed it 'inevitable' that a Premier League club would be awarded the Olympic Stadium does not mean he accepted that there would be no adverse effect. In fact, the contrary is true."

Hearn claims Orient could be destroyed by West Ham's plans to offer cut-price tickets to fill the 60,000-seat stadium, which will retain the running track following a £95m conversion following the Games.

Johnson said the agreement meant the stadium would not become a white elephant. "Just two years ago, it faced the prospect of becoming a dust bowl staging occasional athletics events but now we can look forward to a fantastic multi-use venue at the heart of the community, able to host football and other sports, as well as concerts and events specifically for local people and schools," the mayor said.

Hearn will continue to pursue all legal avenues. "It's savage news, very disappointing. No one, in or outside the government, has asked one single question about how this will affect Leyton Orient," he told TalkSport. "The news that they've rubber-stamped it without asking anything is staggering to me."

The OPLC will enter exclusive negotiations with West Ham and Newham with the aim of agreeing a deal by the end of the month.